Vietnam’s logistics sector is undergoing a significant transformation, driven by a surge in foreign direct investment (FDI), rapid infrastructure development, manufacturing growth, digital innovation, and trade integration. This coordinated progress has made Vietnam a key logistics hub in Southeast Asia. Indonesia, while possessing larger geographic and economic potential, has struggled with inefficiencies in its logistics ecosystem. By studying Vietnam’s recent advancements, Indonesia can chart a path to improve its own logistics and supply chain competitiveness.
Vietnam’s rise as a manufacturing powerhouse has played a pivotal role in stimulating its logistics sector. In the first nine months of 2024, Vietnam attracted US $24.8 billion in FDI, with over 60% of the investment flowing into high-value manufacturing hubs such as Bac Ninh, Hải Phòng, Ho Chi Minh City, Bình Dương, and Đồng Nai. Even more strikingly, in the first four months of 2025, FDI in manufacturing accounted for 78.5% of total inflows, and disbursed capital reached a five-year record of US $6.28 billion.
This capital influx is not incidental—global giants like Samsung, Intel, Nvidia, Apple, and Foxconn are expanding their footprint in Vietnam. As these companies establish and grow operations, they generate significant demand for integrated, efficient, and modern logistics networks.
Source: Gilimex Industrial Park
Vietnam is aggressively expanding its infrastructure to keep pace with industrial growth. The country has committed to completing up to 3,000 kilometers of expressways by the end of 2025, with plans to expand the network to 5,000 kilometers by 2030. Major projects include the North–South expressways and Long Thành International Airport, as well as a proposed US $67 billion high-speed rail line linking Hanoi and Ho Chi Minh City.
Additionally, Vietnam’s deep-water ports such as Cái Mép–Thị Vải are being modernized to accommodate larger cargo volumes and international vessels. These initiatives not only reduce bottlenecks and logistics costs but also improve trade connectivity.
Vietnam has strategically positioned itself as a trade-friendly nation through numerous free trade agreements (FTAs). These include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU–Vietnam Free Trade Agreement (EVFTA), the Regional Comprehensive Economic Partnership (RCEP), and bilateral deals with countries like Korea, Japan, and India.
Through the EVFTA alone, approximately 99% of tariffs between the EU and Vietnam are expected to be eliminated, significantly lowering the cost of trade and increasing export volume. These agreements not only open access to new markets but also elevate the need for robust, modern logistics infrastructure to manage increased trade flows.
Source: Vietcap Investor Conference
Vietnam is embracing digital transformation as part of its logistics modernization. The government’s Resolution 163/NQ-CP (2023) supports digital innovation in supply chains. The rise of e-commerce, projected to reach US $52 billion by 2025, is accelerating the need for real-time tracking, automated warehouses, and cloud-based logistics platforms.
Vietnam is also expanding its digital infrastructure. In 2023, the country invested US $685 million in data centers, with projections indicating a rise to US $1.4 billion by 2029. Coupled with 5G rollout and AI adoption, these investments are transforming Vietnam’s logistics sector into a tech-enabled ecosystem.
Vietnam’s success in attracting international logistics players through public-private partnerships (PPPs) is noteworthy. Companies such as Mapletree, BW Industrial, GLP, and Sembcorp have invested billions in ready-built warehouses, integrated logistics parks, and dry ports. Sembcorp, for instance, invested US $51.5 million in an industrial and logistics complex in Bình Dương and US $57 million in the ICD Rạch Bắp dry port. These developments create efficient logistics hubs around manufacturing zones, ensuring streamlined supply chain operations.
A major differentiator in Vietnam’s rise is its investment in human capital. The National Education Strategy through 2030 is aimed at aligning Vietnamese education standards with leading Asian countries. Vietnam has announced plans to train 50,000 semiconductor engineers by 2030, and global c ompanies like Nvidia are establishing AI R&D centers in the country. This skilled talent pool is essential to support advanced manufacturing and digital logistics. Workforce readiness in logistics—spanning planning, warehousing, and transport management—is a core enabler of Vietnam’s overall competitiveness.
Indonesia can derive several important lessons from Vietnam’s recent success in developing its logistics sector. First, Vietnam’s emphasis on high-tech manufacturing has proven to be a magnet for foreign direct investment (FDI). Indonesia should take a similar approach by enhancing its special economic zones and offering targeted incentives to attract investments in sectors such as electronics, automotive, and green technology. These industries not only generate high economic value but also create long-term demand for advanced logistics services.
Second, infrastructure development has been a cornerstone of Vietnam’s logistics transformation. With Vietnam on track to complete 3,000 kilometers of expressways by 2025, Indonesia must address delays in its own infrastructure projects. Prioritizing critical logistics corridors, such as the Trans-Java and Trans-Sumatra highways, would greatly improve connectivity and reduce transport costs for goods moving across the archipelago.
Third, Vietnam’s proactive engagement in trade agreements has significantly expanded its market access and boosted export volumes. To emulate this, Indonesia should expedite the finalization of the EU–Indonesia Comprehensive Economic Partnership Agreement (CEPA) and take full advantage of the Regional Comprehensive Economic Partnership (RCEP). Aligning logistics infrastructure with trade goals will ensure the country can handle growing trade flows efficiently.
Fourth, digital transformation in logistics remains an area where Indonesia lags behind. While Vietnam has embraced technologies such as centralized cargo tracking, digital customs clearance, and warehouse automation, Indonesia still faces inefficiencies in these areas. Investing in digital logistics platforms would streamline operations, reduce lead times, and improve transparency across the supply chain.
Fifth, Vietnam’s success in attracting global logistics companies has been bolstered by transparent and investor-friendly public-private partnership (PPP) frameworks. Indonesia should work to replicate this model by simplifying regulations, minimizing bureaucratic hurdles, and fostering a more conducive environment for private sector investment in logistics infrastructure and services.
Finally, human capital development is essential for sustaining logistics sector growth. Vietnam has made significant strides in training workers for high-tech industries and logistics management. Indonesia must follow suit by expanding logistics-focused vocational programs and collaborating with foreign investors to create talent pipelines that meet modern industry demands. By incorporating these lessons, Indonesia has the opportunity to elevate its logistics sector to regional standards, boost trade competitiveness, and support long-term economic development.
Vietnam’s logistics revolution is the result of a clear national vision: to be a competitive, integrated part of the global supply chain. By combining strong FDI flows, infrastructure investment, digital innovation, trade liberalization, public-private collaboration, and workforce training, Vietnam is setting a high benchmark in Southeast Asia. If Indonesia can internalize and adapt these lessons, it can similarly transform its logistics landscape—unlocking growth, increasing export competitiveness, and driving inclusive development.
